Lingering Covid-19 eats into Hajj economy again

Akbar Ali, proprietor of At-Tyaarr Travels International, has been providing Hajj and Umrah services for 25 years.

Each year, 500-600 pilgrims on average perform Hajj through his agency.

The agency was unable to send 400 pilgrims to Saudi Arabia last year due to the Covid-19 pandemic.                                                         

"My annual turnover from Hajj and Umrah business is around Tk40-50 crore. I lost the whole Hajj business both last year and this year. Besides, I lost 50% of the Umrah business last year," he told The Business Standard.  

His agency deals with 1,000-1,200 Umrah pilgrims every season, but he could not send even a single pilgrim to Saudi Arabia till June this year.

"I had to shut down my office temporarily on 28 February last year amid the pandemic. I believe it will take a couple of years for this industry to return to normalcy. So, I started a fruit orchard in Rajshahi in May last year," he said.                                         

He also said he is still investing in his orchard and hopes to make profits in 2023.                   

At least 25% of Hajj agency owners like Akbar have resorted to alternative means of livelihood in order to survive the unprecedented situation, according to the Hajj Agencies Association of Bangladesh (Haab).                                   

Hajj and Umrah service providers in the country have lost around Tk14,175 crore in two consecutive years due to Covid-19.                                                                               

Not only agency owners in Bangladesh, but also many Bangladeshi migrants in Makkah and Madinah involved in providing Hajj and Umrah services have also lost their jobs because of the global health crisis.                                                                                                                       

Like last year, no pilgrims from outside Saudi Arabia will be allowed to perform Hajj this time either as the kingdom is only allowing a maximum of 60,000 vaccinated citizens and residents, who are already there, between the ages of 18 and 65 to participate in the ritual.                                                                                       

Last year, up to 10,000 Saudi citizens and residents were permitted to perform Hajj.                                                                                       

This year's Hajj commences on 18 July and ends on 22 July, reports Saudi Gazette.                                                                             

The decision to not allow pilgrims from outside has hit around 1,238 Hajj agencies in Bangladesh, causing them financial losses of around Tk10,000 crore in turnover in two years, according to Haab.                                   

During this period, losses from Umrah pilgrimage amounted to Tk4,175 crore.

The Saudi authorities suspended Umrah on 26 February last year until further notice.

Hajj and Umrah agencies in Bangladesh also provide other travel services, such as air tickets.                                                       

But due to frequent flight suspensions, air ticket sales have not gained momentum yet.                   

"I had 20 employees but now have only seven. They are providing travel services, but business has declined by around 80% compared to the pre-pandemic period," said Akbar.                                     

Although Umrah can be performed all year round, most Bangladeshi Umrah pilgrims go to Saudi Arabia during the November-April period, Haab says. 

Umrah is a pilgrimage to Makkah that can be undertaken any time of the year while Hajj is observed on specific dates according to the Islamic lunar calendar.

Hajj is a week-long ritual and a must for financially capable Muslims at least once in their lifetime.

Losses of Hajj, Umrah agencies

Last year, 137,198 Bangladeshis were set to perform Hajj.

The cost of the pilgrimage under private management was fixed at Tk361,800 in the general package and Tk317,000 in the super economy package, says Haab.

Besides, the government offered three Hajj packages last year, beginning from Tk3.15 lakh to up to Tk4.25 lakh.                 

Haab sources said around 2.5 lakh Bangladeshis visit Saudi Arabia to perform Umrah each year through private management.

An Umrah package, including three-star hotel accommodation, costs around Tk1.2 lakh.                                 

Losses caused by the Umrah suspension stood at Tk1,175 crore in the previous season as the agencies were able to send only a segment of pilgrims before the ban, Haab data show.

This year, losses have amounted to around Tk3,000 crore.                  

Haab President M Shahadat Hossain Taslim said the agencies under the association have around 20,000 employees.

Around one lakh people in Bangladesh and Saudi Arabia are involved in the sector indirectly, he said.                                                 

He also said private agencies provide 100% of Umrah services as well as the majority of Hajj services.

"Haab members are experienced in serving pilgrims. It is crucial to help these agencies so that they can survive this crisis."                                   

He said Hajj agencies had not received any government incentives even after demanding that last year.                                   

As the agencies are facing an unprecedented crisis, the religious affairs ministry allowed them to withdraw 50% of their security deposits (Tk10 lakh each) to help them bear maintenance costs. 

Biman Bangladesh Airlines has also lost business as around half the Bangladeshi pilgrims travel to Saudi Arabia by the national flag carrier.

It lost revenues to the tune of Tk806 crore last year against 63,000 pilgrims, Biman sources have said.

The airfare was set at Tk1.38 lakh for Hajj that year.

Bangladeshi migrants' woes in Saudi

The situation has also greatly affected Bangladeshi migrants in the oil-rich country. 

"Many Bangladeshis work in service sectors, including hotels and restaurants that cater to pilgrims in Makkah and Madinah. But employers have cut jobs as no pilgrims are coming here from other countries due to the government restrictions," said Tajuddin Tareq, a Bangladeshi journalist in Saudi Arabia.                                                         

"Iqamas [residence permits] of these migrants were not renewed by their employers. Many workers became undocumented and moved to other cities. Now, they are struggling to find jobs," he added. 

Saudi Arabia's loss from religious tourism

Even though the lion's share of Saudi Arabia's wealth comes from oil, pilgrims visiting Makkah and Madinah are of critical importance to its economy.                                             

The kingdom saw more than 19 million Umrah pilgrims and 2.5 million Hajj pilgrims in 2019.               

Together, they contributed approximately $12 billion or 7% of the total GDP and 20% of the non-oil GDP, reports TRT World.                                                       

But the country has lost a large amount of financial resources as only 60,000 residents have been allowed to perform Hajj this year, a significant departure from the 2.5 million who participated from around the world in 2019, according to the international media. 

In a relaxation of Covid-19 curbs in October last year, Saudi Arabia opened the Grand Mosque for prayers for the first time in seven months and partially resumed Umrah, which usually attracts millions of Muslims from across the globe each year.                                                       

But on 5 April this year, the Saudi Ministry of Hajj and Umrah said only people immunised against Covid-19 would be allowed to perform Umrah, starting from the holy month of Ramadan, reports Al Jazeera.     

Almost 43% of Umrah pilgrims visit Saudi Arabia during the Islamic months of Rajab, Shaban and Ramadan, making it the busiest season after Hajj for agencies economically dependent on religious tourism, reports TRT World.